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Geopolitical Power Shifts to Produce ‘Winners and Losers’ as Off-Fossil Transition Takes Hold

The shift off fossil fuels will produce geopolitical “winners and losers”, and international cooperation will be needed to manage the disruption, according to a commission report released last week during the International Renewable Energy Agency (IRENA) annual general assembly in Abu Dhabi.

The report reaches four main conclusions, PV Magazine reports: “that high penetration of renewables will result in a new geopolitical map, marking a departure from a century dominated by fossil fuels; that the new order will feature ‘enhanced leadership’ from China; that it will offer many nations increased energy independence; and that a democratization of energy supply is under way.”

An IRENA release notes that, “unlike fossil fuels, renewable energy sources are available in one form or another in most geographic locations. This abundance will strengthen energy security and promote greater energy independence for most states.”

And “as countries develop renewables and increasingly integrate their electricity grids with neighbouring countries, new interdependencies and trade patterns will emerge. The analysis finds oil and gas-related conflict may decline, as will the strategic importance of some maritime chokepoints.”

The commission also foresees “new energy leaders” emerging, “with large investments in renewable energy technologies strengthening the influence of some countries,” IRENA adds. “China, for instance, has enhanced its geopolitical standing by taking the lead in the clean energy race to become the world’s largest producer, exporter, and installer of solar panels, wind turbines, batteries, and electric vehicles. Fossil fuel exporters may see a decline in their global reach and influence unless they adapt their economies for the new energy age.”

“Unless you have a response strategy to the changes you see around you, you are going to be in trouble,” said outgoing IRENA director-general Adnan Z. Amin. “Those countries that will be unable to do this, those industries that are not able to respond to the disruption we see coming, will end up with major problems.”

“This is the first report ever presented about the new geopolitical map that is emerging fast all around the world,” said lead commissioner and former Iceland president Olafur Ragnar Grimsson. “A fascinating new geopolitical reality…is emerging in front of us,” he added. But the commission report “has to become a guideline,” and a tool.

“While the report finds overall positive effects from the new geopolitical reality, there is a dark side to the changes, and an emerging paradox relating to the strategic minerals required for battery storage,” PV Mag notes. While “the transition will result in increased energy independence in some parts of the world,” a small number of African countries will gain standing due to the concentration of strategic minerals like cobalt.

“It is not just about producing energy, but what you do with it,” said report commissioner Carlos Lopes of the University of Cape Town. “We will still have dependence on certain minerals that will be highly concentrated.” That reality will translate into “an opportunity for Africa to increase its assertiveness, provided the right governance is in place.”

Former EU energy commissioner Andris Piebalgs, now with the Florence School of Regulation, cited power-to-gas as a significant emerging technology and pointed to the growing importance of renewable energy exports—via international grids, green hydrogen, or synthetic natural gas. “There are completely different physics…electricity has different quality,” he said. “So we need to think from a different perspective. Grids will become, by far, more important. I personally very much believe in power-to-gas as easily scalable.”

During the assembly, IRENA also released a report on women in the renewable energy sector.

“Renewable energy employs about 32% women, compared to 22% in the energy sector overall. Still, within renewables, women’s participation in science, technology, engineering, and mathematics (STEM) jobs is far lower than in administrative jobs,” the agency says in a release. The survey of employees, companies and institutions “finds that much remains to be done to boost women’s participation and allow their talents to be fully utilized.”